Central Regulator Approves Peak Tariffs for Inter-State Renewable Projects

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The Central Electricity Regulatory Commission (CERC) recently adopted the off-peak power tariff of ₹2.88 (~$0.035)/kWh for 1,200 MW of interstate transmission system (ISTS)-connected renewable energy projects (ISTS VII) with assured peak power supply.

It approved the peak power tariff of ₹6.12 (~$0.074)/kWh for 900 MW awarded to Greenko Energies and ₹6.85 (~$0.083)/kWh for 300 MW awarded to ReNew Solar Power.

The central regulator also approved the trading margin of ₹0.07 (~$0.0009)/kWh, as agreed in the power sale agreement (PSA).

It added that in case of failure by the Solar Energy Corporation of India (SECI) to provide an escrow arrangement or irrevocable, unconditional, and revolving letter of credit to the wind generators, the trading margin will be limited to ₹0.02 (~$0.0002)/kWh as specified in trading license regulations.

SECI had filed a tariff adoption for 1,200 MW of renewable energy projects connected to the ISTS with assured peak power supply.

Background

In August 2019, SECI had invited bids to set up 1,200 MW of ISTS-connected renewable energy projects (ISTS VII) with assured peak power supply in the country.

Later in the e-reverse auction, Greenko Energies (900 MW) and ReNew Solar Power (300 MW) were declared successful bidders.

Subsequently, SECI signed PSAs with the Damodar Valley Corporation, distribution companies (DISCOMs) of Bihar, DISCOMs of Rajasthan, and the Electricity Department of Goa, at the rate of ₹2.88 (~$0.035)/kWh (off-peak tariff) + ₹6.12 (~$0.074)/kWh (peak hour tariff) for 900 MW and ₹2.88 (~$0.035)/kWh (off-peak tariff) + ₹6.85 (~$0.083)/kWh (peak hour tariff) for 300 MW plus a trading margin of ₹0.07 (~$0.0009)/kWh.

Off-peak hours refer to the energy scheduling hours (between and including) 09:00 hours up to 18:00 hours and the hours (between and including) 00:00 hours up to 06:00 hours of the subsequent day.

Peak hours are (between and including) 06:00 hours up to 09:00 hours, and (between and including) 18:00 hours to 24:00 hours of the same day.

SECI noted that the tariffs discovered for the procurement of power from renewable power developers were competitive and beneficial to the distribution licensees and the consumers.

SECI stated that solar, wind and wind-solar hybrid guidelines are for the promotion and procurement of renewable power. The guidelines do not mandate that renewable power should always be procured at uniform tariff on a 24×7 basis.

Commission’s analysis

The Commission said that the peak power program seeks to make firm and dispatchable renewable power available and meet the demand pattern of distribution licensees during peak hours at competitive tariffs.

The Commission adopted the individual tariffs for the renewable power projects, as agreed to by the successful bidders, and for which PPAs had been entered into by SECI based on the PSAs with the DISCOMs.

The Commission also approved the trading margin of ₹0.07 (~$0.0009)/kWh as agreed in the PSA, which was in consonance with the provisions of the trading license regulations.

Earlier, CERC had approved a tariff of ₹2.41 (~$0.032)/kWh for 1,110 MW of wind-solar hybrid power projects as agreed by the successful bidders. It also approved the trading margin of ₹0.07 (~$0.0009)/kWh as agreed by the distribution licensees.

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